Ariba LIVE — An Update on the Core Business and Introducing the "Cloud" (Dispatch 3, Part 2)

During the financial analyst briefing yesterday at LIVE, Ariba spoke extensively about targeting what it describes as the "five minds that matter" in organizations as customers: procurement, finance, treasury, A/P, sales and marketing and IT (depending on who you count as part of finance versus separate, I count six, but the exact number is irrelevant). The point is that Ariba is no longer just trying to capture the hearts, minds and wallets of procurement professionals -- and the suppliers who pay a transactional fee (or tax, as some call it) to do business with them. Ariba is now targeting a much broader list of potential customers.

The case studies they quickly touched on during the briefing highlighted this. These included Astra Zeneca, who "started out by buying better" and then moved to touch-less invoice processes that now capture 60% of their invoice program time, resulting in an on-time payment increase of 94%. It also includes Nike, that is now paying sweat shops (AKA, their suppliers) faster than ever before and earning back some dough in the process at the expense of CIT and other factors in the sector.

To wit, by using Ariba, Nike has increased its discount capture rate by 90%, improved its average discount to 1.5% (representing 24% APR) and boosted supplier participation to 20% overall. And Stage, a department store chain and holding company, used Ariba Discovery to identify a new supplier (I think they mentioned it was for shopping carts, ironically after their previous supplier went bankrupt). The process doubled the number of suppliers bidding on the business, "boosted average sourcing savings to 15.5%, and reduced sourcing cycle time from greater than 45 days to 3-5 days".

Outside of highlighting customer successes to prove that Ariba's new solutions have traction, Ariba spent quite a bit of time explaining the evolution of its overall go-to-market strategy. This includes an expanded ecosystem of partners that will be "geographic specific, category specific and market specific" as well as future "bolt-on acquisitions" which will enable specific network, category and geographic strategies.

Check back later this morning for an update on Ariba's network business model, philosophy and vision.

- Jason Busch

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